Sun setting on B.C.’s independent power sector

The renewable projects coming online this year are expected to be the last for decades

In the coming months, independent power producers in B.C. will mark the official commissioning of several new wind and run-of-river projects.

And that might be the last B.C. sees of any significant new independent power projects for years – possibly decades.

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“That’s going to be it,” said Ross Beaty, executive chairman of Alterra Power Corp., which will soon commission the new Jimmie Creek run-of-river project at Toba Inlet. “That’s going to be the last we’re going to see for a long time.”

If there was any question that the independent power business in B.C. may be shifting into sunset mode, a recent B.C. Environmental Assessment Office (EAO) house-cleaning of stalled wind and run-of-river proposals should put those doubts to rest.

In April and May alone, five wind and six run-of-river projects were officially withdrawn from the EAO’s list of reviewable projects. Some were withdrawn voluntarily; others were removed for a lack of progress.

B.C.’s independent power sector, which invested more than $8 billion in B.C. in recent years, might have been rendered redundant by a single project: the $9-billion Site C dam.

In February, the Canadian Wind Energy Association announced it was pulling up stakes in B.C. to focus on Alberta and Saskatchewan.

Wind power is something that can be built virtually anywhere. Run-of-river developers have far fewer opportunities outside of B.C. because few jurisdictions have the province’s abundance of mountain streams.

“It certainly is a down period for us – we can’t duck it,” said Paul Kariya, executive director of Clean Energy BC, which represents the renewable energy sector in B.C. “The government has decided to do Site C, that’s one part of it. The other is that load has dropped.”

Projects shelved

BC Hydro hasn’t published an updated load forecast for three years. A new one is expected soon, and predictions are that the province’s anticipated demand for power will be down.

“I think part of it is – probably – it is not good news,” said Kariya, “and they want to get Site C underway. That means, for our sector, it’s going to be potentially a long while.”

BC Hydro insists it issued an updated forecast earlier this year, but industry insiders say it wasn’t a full load forecast.

“Now you have Site C, and it’s a real category killer,” Beaty said. “It is really constraining the ability of the independent power producers to generate any new generation for the next 10 or even maybe 20 years in British Columbia.”

One of the developers with projects removed from the EAO process – Run of River Power Inc., a former publicly listed company – has been defunct since 2014.

Another, Finavera Wind Energy Inc., abandoned the wind power sector in 2015, sold its wind assets, changed its name to Finavera Solar Energy Inc. and, more recently, to Solar Alliance Energy Inc., and is now focused on rooftop solar energy.

Alterra has withdrawn two projects from the EAO process, including the $4 billion to $5 billion Bute Inlet hydroelectric project. Alterra spent $20 million trying to develop the Bute Inlet project but formally withdrew from the environmental review process last month.

Alterra, Innergex Renewable Energy Inc. and other renewable energy companies in B.C. will continue to operate their wind and run-of-river projects in the province, but are unlikely to develop any significant new ones.

The only new renewable energy projects likely to proceed will be small ones under BC Hydro’s standing-offer program. There might be a push to remove remote communities from diesel-power dependence by building distributed power projects.

“Although important in terms of electrical production, they’re extremely small,” said David Austin, a lawyer specializing in energy for Clark Wilson LLP.

“Independent power companies in B.C. really have no future in the province and have to go elsewhere,” said Beaty. “We’re focused almost entirely on the U.S., where they’re going gangbusters on developing clean-energy projects.”

The long view

One policy change that could create some opportunities for new renewable energy projects in B.C. is a direction to extend hydro power to Northeast B.C.’s natural gas fields.

There has also been talk about B.C. partnering with Alberta to build new transmission lines to Alberta to power the oilsands, which could create significant new demand for renewable power in B.C. and Alberta.

Juergen Puetter, founder of Aeolis Wind Power, which developed B.C.’s first wind farm, agrees that the short-term prospects for independent power projects in B.C. are not good.

However, he takes the longer view that a carbon-constrained world will eventually create new demand for electric vehicles, renewable fuels and other clean-energy options.

He also thinks there might be opportunities for “merchant power” – privately built renewable projects and power lines paid for by the industries that need it.

For that reason, Aeolis has not withdrawn its wind projects from the EAO process. They include the Red Willow wind farm, in partnership with Boralex Inc. If built, it would be the province’s largest wind farm.

Aeolis is also working on smaller projects under Hydro’s standing-offer program, including the Moose Lake wind project, which is nearing completion.

As Clean Energy Canada report released last week shows that investment in renewable energy has been dropping in several provinces, not just B.C., as the build-out of renewables prompted by government programs comes to completition.

Close to $800 million was spent on clean energy projects in B.C. alone in 2015, which is 52 per cent less than what was spent in the previous year. Canada-wide, investment in renewables peaked at $12 billion in 2014, falling to $10 billion in 2015. According to the report, that’s equivalent to what is spent in mining and quarrying.

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